Emanuel defends income-tax hike refund seizure

Mayor Rahm Emanuel today gave an impassioned defense of the city’s effort to intercept millions in state income tax refunds from people across Illinois who owe City Hall money.

The speech came after the City Council approved the plan 41-8.

“At every level we have protected the taxpayers of the city of Chicago by not raising property taxes, not raising or creating an income tax, not raising a sales taxes, not raising a gas tax,” Emanuel said, noting other efforts to collect millions of dollars in unpaid debt from banks and city employees.

“And we made sure those who are delinquent, those who are deadbeats, paid up, because the law-abiding citizens cannot carry the freight for everybody else,” Emanuel added. “That is wrong to do. And a system cannot be created around allowing a permissible amount of cheating. It becomes epidemic. And, so we all decided not to taxes, but yes to responsible behavior. And we cracked down, even prior to this.”

Emanuel did raise water and sewer rates, the cost of city stickers and the parking tax in his first budget aldermen approved in November.

Under the latest measure, made possible by a new state law, income tax refunds will be diverted to the city, possibly as soon as this spring, after those affected have a chance to protest the diversion before a state hearing officer.

The city hopes to collect between $8 million and $20 million in unpaid debt.

The measure will affect individuals and businesses that received final notices for debt owned on parking tickets, red-light citations and administrative hearing fines.

Ald. Robert Fioretti, 2nd, one of the aldermen to vote against it, said, “if you do the crime, you pay the fine.” But he described the city’s administrative hearing system as “a kangaroo court” that needs to be fixed before income-tax refunds are diverted to the city.

The hearings are held to determine building, fire and sanitary code violation fines, along with those levied for other infractions, like repeat false burglar alarms.

Emanuel said that the issue of addressing perceived flaws in the administrative hearing process is a different issue than whether to go after bad debt.

Speaking strongly in favor of the new measure, being used on some other cities like Joliet and Springfield, was Ald. Carrie Austin, 34th, chairman of the Budget Committee.

“I think it’s only fair that we use every measure we can that is afforded to us to collect the debt,” Austin said. “I know there are many who have objections to this, but how else do we collect on the debts that are owed to us.”

In addition to Fioretti, the following aldermen voted against the measure: Proco “Joe” Moreno, 1st; Leslie Hairston, 5th; Roderick Sawyer, 6th; George Cardenas, 12th; Willie Cochran, 20th; Michael Chandler, 24th; Nicholas Sposato, 36th.